In a recent blog article, titled Change is in The Air, 3 Extensions Covering 2017 Have Been Modified, we discussed IRS modified tax provisions for last year. They were all a part of the Budget Bipartisan Act of 2018 on February 9th, which renewed for 2017 a wide range of individual and business tax benefits that had expired at the end of 2016.
Be sure to check it out. Don’t be intimidated by these changes. IRS Solutions software gives you the confidence to provide services you may have been uncomfortable with in the past.
On February 22nd the IRS said that it is ready to process tax year 2017 returns claiming three popular tax benefits recently renewed retroactively into law.
3 Benefits Most Likely to be Claimed
There are 3 benefits most likely to be claimed on returns filed early in the tax season. This year’s taxpayers will be happy to know the IRS has reprogrammed its processing for their 2017 taxes.
Taxpayers may now claim file returns claiming the following:
- Exclusion from gross income of discharge of qualified principal residence indebtedness (often, foreclosure-related debt forgiveness), claimed on Form 982, which is used to the amount of discharged indebtedness that can be excluded from gross income. This is determined under certain circumstances described in section 108.
- Mortgage insurance premiums treated as qualified residence interest, generally claimed by low- and middle-income filers on Schedule A, (1040) which is used to calculate itemized deductions. In most cases, federal income tax will be less if taking the larger of the itemized deductions or standard deduction.
- Deduction for qualified tuition and related expenses claimed on Form 8917. Use Form 8917 to calculate the deduction for tuition and fees expenses paid.
To ensure their available software processes can accommodate the new provisions, the IRS is working closely with tax professionals and the tax-preparation industry.
Some things have stayed the same despite all of the modifications: The fastest and most accurate way to receive a tax refund is still filing electronically using direct deposit. It’s also the most efficient.
May clients who have already filed their returns claim one of the above tax benefits?
Yes. They may do so by filing an amended return on Form 1040X. However, amended returns can’t be filed electronically. They can take up to 16 weeks to process. For details, visit IRS.gov.
The IRS is continuing to update its systems to handle returns claiming the other tax benefits extended by the new law enacted on Feb. 9th but keep in mind another benefit of IRS Solutions Software, aside from giving you the confidence to provide services you may have been uncomfortable with in the past, is the training you get on our monthly case study calls.
